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Erasmus, the world's biggest student exchange, is to expand after 25 years of funding European students to go abroad. But with the EU budget being slashed, does the grant scheme deserve a 50 percent boost to its budget?

Since its launch in 1988, the EU's flagship student programme has paid grants to over three million Europeans in higher education to study or work elsewhere in the Union.

The 2011-2012 academic year saw 3,328 learning institutions across Europe sending their students abroad on Erasmus placements.

And the "Erasmus+" project approved by the European Parliament on Tuesday will invest in the scheme further, merging the student exchange with six other education initiatives to form a "streamlined" programme to give financial support to 4 million people, at a cost of €14.7 billion over seven years.

Around €4.9 billion of that is dedicated to grants for higher education and it represents around a 50 percent increase on Erasmus' budget for the previous seven years.

The new unified system will extend beneficiaries to include "youth leaders, volunteers and young sportsmen", according to the Parliament.

But with austerity-hit member states wrestling the EU's next seven-year budget down by €15 billion to €960 billion – the first cut to a multi-year plan in the Union's history - some are questioning why more taxpayer cash is being spent on non-means-tested grants to university students, while other initiatives are seeing cuts.

Stuart Agnew, an MEP from the anti-EU UK Independence Party, told the European Parliament on Tuesday he saw Erasmus as an unnecessary and "glorified" alternative to national-run programmes, and attacked it as the EU "cynically using" young people to "further its own objectives" in fostering "European values".

Spanish education minister Jose Ignacio Wert also criticized the Erasmus+ plans on Monday, when he claimed Spain – which sent and received more Erasmus students than any other EU member state in the 2011/2012 academic year – would have to halve their grant payments under the new programme's funding system.

The scheme seemed in jeopardy back in October 2012 when it posted a €90 million budget deficit just as EU institutions faced an overall shortfall of €8.9 billion for the year.

EU Commission president Jose Manuel Barroso leapt to the scheme's defence. "These payments are essential to revive growth and jobs in Europe," he said in a statement in October last year.

And as debate continued, students planning their years abroad at universities across the 28 EU member states were left unsure if they would receive funding for their own "life-changing experiences".

But when a last-minute agreement by European Parliament and member states plugged part of the shortfall with a €6 billion budget "top-up" in December, Erasmus was among the projects saved, with the Commission proudly announcing it would fund 280,000 exchange students in the 2013-2014 academic year.

So why has a programme which went €90 million over budget last year and came close to leaving thousands of year abroad hopefuls high and dry not just escaped budget cutbacks but netted further support and funds in the new EU seven-year budget plan?

Brikena Xhomaqi, director of the Erasmus Student Network (ESN), a body representing Erasmus students, told The Local the scheme stood out among EU programmes as a particular success.

"It is the only EU initiative that's worked well across all the member countries," she said, because it allows people to "travel across borders, make new friends and develop their European identity".

Doing an Erasmus placement also makes young people more employable, according to ESN treasurer Jonathan Jelves. "Just the experience itself is a huge challenge," he told The Local.

It is an "empowering experience" and "forces people to grow and become independent," he added.

Students return from Erasmus "having matured a great deal," he said, and "are ahead of their peers." "They are more effective, productive workers," compared to the average graduate, he said.

Jelves also extolled the value of Erasmus to the European job market. "Erasmus students become very mobile, not afraid to move around," he said.

"They don't have this fear of going to work in a new country with a new language because they've already done it," he explained.